HUTCHISON Whampoa has won A-plus and single-A long-term local and foreign currency issuer ratings, respectively, from Standard & Poor's (S & P), which says the group's financial policies are conservative. 'The outlook for the local currency rating is stable,' said S & P. It assigned a positive outlook for the foreign currency A rating. 'Hutchison's long-term foreign currency rating is constrained by Hong Kong's long-term sovereign rating of A with a positive outlook,' it said. S & P cited the control exerted by Li Ka-shing, chairman of both Hutchison and its 45 per cent shareholder Cheung Kong (Holdings), in its rating report. It said Cheung Kong was primarily involved in Hong Kong and China property development and was not expected 'to adversely influence the strategic direction or financial posture of Hutchison'. Hutchison had 9.2 million square feet of mainly retail and industrial space in Hong Kong, generating more than $1.2 billion of recurring net annual rental. 'Higher risk development activities are usually joint ventured with other parties, including Cheung Kong,' said S & P, adding that Hutchison would be redeveloping a prime site in Central. It said the company had strong market positions in its core areas - terminals, property, retail, telecommunications and energy - though Husky Oil was vulnerable to a market downturn. 'These operations, focused on industries basic to Hong Kong's economic prosperity, generate reliable cash flows and strong returns,' the agency said. 'Ratings also reflect Hutchison's sound strategic growth plans, conservative finances and meaningful industry diversity, offset somewhat by a concentration of activities in Hong Kong.' S & P said Hutchison's terminals business generated reliable operating cash flows and a high return on investment and had long-term earnings growth potential. Hong Kong International Terminals, 77.5 per cent owned by Hutchison, handles over 60 per cent of the containerised goods shipped through the Hong Kong port of Kwai Chung,S & P said. Its strategic investments in container ports at Shanghai, Yantian and the Pearl River delta should result in Hutchison benefiting from strong growth in manufactured goods exports from China through Kwai Chung and the mainland ports. 'Hutchison also owns the Port of Felixstowe, Britain's largest and Europe's fourth largest container port.' It said the retail and beverage-making operations of A S Watson & Co had strong local market positions and aggressive plans in Hong Kong, Taiwan and China. But the telecommunications group contributed only marginal profits in 1993, it said, with the Hong Kong operations' earnings partly offset by start-up costs from the European business. Hongkong Electric, 34.6 per cent-owned by Hutchison, generated consistent earnings and dividends. But Canadian-based oil and natural gas producer Husky Oil, 49 per cent controlled by Hutchison and an additional 46 per cent by Mr Li, was highly leveraged and its profitability was exposed to a deterioration in market conditions, although its cash flow was positive, S & P said.